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China is buying Canada: Inside the new real estate frenzy

How China’s affection for Canada’s real estate is reshaping the nation’s housing market well beyond Vancouver


 

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Paul Shen can tick off the reasons Mainland Chinese people buy property in Canada as surely as any fast-talking B.C. realtor. Some long to escape the fouled earth and soupy air of their country’s teeming cities, he explains, while others are following relatives to enclaves so well-populated by other Chinese expats they hardly feel like foreigners.

The richest, of course, regard homes in the West as stable vessels for disposable cash, but Shen lays no claim to such affluence. Last spring, the 39-year-old left behind his middle-management advertising job in Shanghai to seek the dream of home ownership he and his wife couldn’t afford in their home city. “We just followed our hearts to begin a totally different life,” he tells Maclean’s, adding: “We can make the house dream come true in Canada.”

The starting point was one-half of a modest duplex near downtown Victoria, close to the university where his wife is seeking a master’s degree, and priced about right for their limited means. Selling points ranged from the quiet of the street—perfect for their six-year-old son—to the stunning Vancouver Island vistas all around. High on his list, though, was Victoria’s comfortable distance from the bustling Chinese communities of B.C.’s Lower Mainland. As Shen—betraying his limited knowledge of pre-settlement Canadian history—puts it: “We wanted a place that would allow us to live with the natives.”

It’s hard not to smile at his idealism. Substitute any one of two dozen nationalities, after all, and you have a chapter in Canada’s cherished narrative of migration, settlement and shared prosperity.

But as a Chinese newcomer with a buy-at-all-costs resolve, Shen also personifies a phenomenon dividing those “natives” he’d like to call his neighbours. In the past five years, the flow of money from mainland China into Canadian real estate has reached what many consider dangerous levels, contributing to a gold-rush atmosphere in the nation’s leading cities, while stirring anger among young, middle-class Canadians who feel shut out of their hometown markets.

Its impact on Vancouver’s gravity-defying boom is the best known—and most hotly debated—example, as eye-popping price gains leave behind such quaint indicators as average household income, or regional economic activity. “We’re bringing in people who just want to park their money here,” says Justin Fung, a software engineer and second-generation Chinese-Canadian who counts himself among those frustrated by Vancouver’s surreal housing market. “They’re driving up housing prices and simply treat this city as a resort.”

Yet the amphetamine rush of Chinese cash has been felt far beyond the disappearing pastures of the Fraser Valley—especially in the last couple of years. Fully 10 per cent of new condominiums being built in central Toronto are now going to foreign buyers, according to a survey released in April by the Canada Mortgage and Housing Corporation (CMHC); veterans of the city’s rough-and-tumble real estate market believe the vast majority are mainland Chinese. On Juwai.com, an online listing service where Chinese buyers can look for international real estate, inquiries about specific properties in Ontario rose 143 per cent in 2015, with the total value of those homes hitting $11.2 billion. Quebec saw its numbers more than triple, while Alberta’s numbers rose 70 per cent.

Meanwhile, Chinese developers have made buys in locations that have left analysts scratching their heads, including Nova Scotia’s remote Eastern Shore and an abandoned mining town in the B.C. Interior. The stated reasons for such purchases don’t entirely compute (neither seems the likely site, as owners and local officials suggest, for a full-service, self-contained vacation community).

But the broader incentives are easy to see. Next to China’s own volatile real estate markets, property almost anywhere in the Western world can seem an island of financial sanity, says Matthew Moore, president of Juwai’s North American operations. “The year-on-year property increase in Shenzhen, one of China’s tier-one cities, was close to 60 per cent,” he observes. “This is about wealth preservation.” Adding to that sense of urgency: even the most privileged Chinese mainlanders have for decades been shut out of buying property, which Moore describes as the “favourite asset class” of Chinese dating back to its pre-Revolution days. This is on top of profound worries many Chinese have about their country’s overbearing political system, the lack of transparent rule of law and rampant corruption.

All of which has landed Canada in an economic paradox. In Vancouver, and increasingly Toronto, fear abounds that Chinese money has helped inflate a property balloon of Hindenburg proportions, driving house values out of reach for even well-off professionals, while raising the risk of a crash at the first sign of adverse conditions. Yet the self-same conditions are adding handsomely to the net worth of millions of homeowners, and supporting a constellation of housing-related industries, from real estate sales to interior decoration. They could be considered the main engine of Canada’s stop-and-go economy, and for those along for the ride—builders, property lawyers, revenue-hungry local politicians—the question isn’t so much what Chinese buyers are doing to the Canadian property market. It’s what might happen without them.

May 3, 2016 - Vancouver, B.C. - House for sale signs with Mandarin or Cantonese. Photo by Jimmy Jeong

A house for sale in Vancouver, B.C. on May 2, 2016. Photo by Jimmy Jeong

How far we’ve travelled down this bejewelled highway is only starting to come clear. The CMHC’s latest condo numbers tracking the ownership of condos were part of a concerted effort on the part of the Crown corporation to measure the phenomenon, based on its mandate to gather data on housing, and to foster market stability. (The agency has been roundly criticized in the past for Canada’s dearth of dependable real estate statistics.) By breaking down the numbers according to the age of the building in question, it provided the first reliable indicator of accelerated foreign buying. In Vancouver, for instance, foreign ownership of condos built before 1990 stands at just two per cent. For structures completed since 2010, that number climbs to six per cent.

CMHC’s plan now is to produce a more comprehensive report by the fourth quarter of this year, says chief economist Bob Dugan, capturing not just condominiums but all forms of residential property. But that won’t be easy. Gathering the data requires co-operation on the part of everyone from provincial property registries to local realtors—not all of whom are eager to shed light on their lucrative sources of new-found income.

Related: Just how safe is the ‘safe’ world of syndicated mortgages?

It might also require a better understanding of who constitutes a “foreign owner.” The CMHC’s current definition—an owner who does not reside in Canada—excludes all kinds of domestic arrangements under which foreigners purchase homes abroad, suggesting the recent condo numbers understate the influx of outside buyers. It’s common for foreign-based buyers to send their children and spouses here while remaining in their home country. Should such buyers be lumped in with overseas owners of income properties? Or with Chinese Canadians who spend part of the year outside the country?

Yet even the crudest measurements suggest a breathtaking upsurge in interest that would rate Canada’s big cities on par with London and New York in the eyes of Chinese buyers. National Bank of Canada economist Peter Routledge has “hypothesized” that Chinese buyers last year shelled out nearly $12 billion on real estate in Vancouver, accounting for 33 per cent of the city’s sales. For Toronto, he pegged the number at $8.4 billion, representing 14 per cent of sales.

Other analysts have dismissed the estimate, which Routledge produced by combining U.S. foreign investment figures with a survey of property ownership among 77 affluent Chinese people. But the numbers seemed to support an earlier, more controversial, study of home sales in three of Vancouver’s most expensive neighbourhoods, showing that 66 per cent of houses sold during a six-month period starting in September 2014 went to Chinese people with non-anglicized names. The author of that report, an urban planning professor named Andy Yan, interpreted that to mean the buyers were new arrivals. That assumption was enough to draw accusations of racism, but Yan was undaunted, telling CBC, “It’s about the message, not one messenger.”

Related: What’s the point of Vancouver?

At least part of the message is beyond dispute: the cash flowing out of China into assets around the world has hit tsunami proportions, driven by fears of a slowing economy and a declining currency. Estimates peg the amount Chinese investors and companies moved out of the country last year at nearly $1 trillion, up more than sevenfold from 2014. Much of that money is being spent by Chinese companies looking to snap up Western assets, such as ChemChina’s US$43-billion bid to take over Swiss seed company Syngenta, or to pay down U.S. dollar-denominated debts. But a sizable portion was directed into overseas real estate.

With diversification as the new mantra, China’s newly rich—as of 2014 there were 3.6 million millionaires in the country—are desperately seeking safer places to park their money. Most put foreign real estate at the top of their list. That’s partly due to its stability, says Jim Zhang, an RBC private banker in Toronto, whose client list includes many so-called “high-net worth” Chinese investors; it’s also born of instinctive suspicion toward their own government. “In Canada, everything in my bank account is mine, as long as I pay tax,” a client recently told him. “In China, even if the government’s name is not on my account, whenever they want my money, they’ll have my money.”

Chinese investors visit a Canadian property investment company at an international property exhibition in Beijing on May 17, 2014. (Wang Zhao/AFP/Getty)

Chinese investors visit a Canadian property investment company at an international property exhibition in Beijing on May 17, 2014. (Wang Zhao/AFP/Getty)

Fortunately for those millionaires, a thriving industry has formed to facilitate their wishes to move their money abroad—and they need not even board a plane. In mid-April, more than 40,000 people crammed into the Beijing International Property & Investment Expo, a four-day mixer of buyers eager to snag deals and sellers eager to snag deep-pocketed investors. Representatives from 31 countries attended, but many of the land-shoppers veered toward the booths covered in Maple Leaf flags. The three Canadian exhibitors barely had time to sit.

Related: The insane expectations driving the Canadian housing market

Alex Majdpour, president of Sans Souci Executive Realty, hired two additional translators to keep up with the flood of potential buyers, and came away with 100 leads. “We thought, why not take the real estate to them?” says Majdpour, whose Toronto-based company sells properties across Canada. “Why not go straight to the source?” Prospective buyers talked to the Canadian exhibitors about making purchases in cash, and expressed the greatest interest in properties located around Vancouver and Toronto. The sellers fielded repeat questions about immigration and payments, particularly how to get money out of the country. (China limits foreign purchases of currency to $50,000 per year, and has been tightening controls to keep money from flowing elsewhere. This has left lingering questions about how so many mainland Chinese have been able to afford expensive houses abroad.)

There was another factor surely lurking in the minds of prospective buyers at the expo: Canada, with its weakened currency, is on sale. The yuan is fixed to the U.S. dollar, and as the loonie fell against the greenback over the last two years, it raised the buying power of Chinese real estate buyers. “If they’re thinking of buying property in Canada now,” says Zhang, the RBC banker, “they’re getting a 25 or 30 per cent discount.”

While experts try to determine how much money is flowing out of China, there’s no question a good deal of it has come to rest in leafy Vancouver neighbourhoods, sparking anxiety and deep divides in the community. So decoupled have local house prices become from economic fundamentals that it now requires a mind-boggling 109 per cent of the average household’s disposable income to service the costs—like mortgage payments and insurance—needed to own the average home in the city, according to research by the Royal Bank of Canada. There’s no sign things are about to slow down. A recent report by real estate firm Re/Max found prices surged by 24 per cent in the city during the first quarter compared to the same time last year, and pegged the average price of a single family home at $2 million. The real estate firm noted the emergence of a vicious cycle, as intense competition for houses caused would-be sellers to hold off on listing their homes (for fear they won’t be able to afford a new one) thereby limiting the available inventory and driving prices even further into the stratosphere.

The frenzy has taken a visible toll on one of the world’s “most livable cities,” resulting in hollowed-out neighbourhoods, absentee investors, and vacant, decrepit homes as huge numbers of investment properties simply sit unoccupied. What statisticians have been slow to chart has been ruefully documented in popular blogs like Vancouver Vanishes and Beautiful Empty Homes of Vancouver, which tracks empty, multi-million-dollar character and heritage houses.

Frustration has hit a boil, and it’s been on full display at a series of “emergency” housing town halls, headlined by the front bench of the Opposition NDP. Hundreds have turned out to sit in church basements to voice their concerns, and their anger. At one held last week at St. Paul’s Church in Vancouver’s Mount Pleasant neighbourhood, a new advocacy group with a darkly intimidating acronym HALT—Housing Action for Local Taxpayers—turned up with picket signs.

Related: Can families still afford Vancouver?

David Eby, the NDP candidate running against B.C. Premier and Liberal Leader Christy Clark in the Vancouver-Point Grey riding, attends a provincial election campaign stop with leader Adrian Dix at Kitsilano Beach Park in Vancouver, B.C., on Saturday May 4, 2013. THE CANADIAN PRESS/Darryl Dyck

David Eby, the NDP candidate running against B.C. Premier and Liberal Leader Christy Clark in the Vancouver-Point Grey riding, attends a provincial election campaign stop with leader Adrian Dix at Kitsilano Beach Park in Vancouver, B.C., on Saturday May 4, 2013. THE CANADIAN PRESS/Darryl Dyck

Among the day’s speakers was David Eby. The Vancouver MLA, a lawyer touted as a future NDP leader, is among those priced out of the local market. Eby and his wife, a nurse currently in medical school, recently sold their 530-sq.-ft., one-bedroom condo in Kitsilano, which was too cramped for the two of them and their 19-month-old toddler. “A two-bedroom condo in my constituency starts at $600,000—a non-starter for us,” he says. So they’re renting a $2,700-a-month two-bedroom condo at UBC. It is, to put it mildly, a sobering thought: the man many believe could one day lead B.C. might soon be priced out of the province’s foremost city.

Eby bristles at the Boomer notion this is all just a bunch of Millennial whining. “The expectation that young people have is not as advertised—it’s not a detached home they’re after. It’s: ‘Can I have a separate bedroom for my kids?’ If you spend 10 minutes talking to any of the Millennials who are just holding on in this city by their fingernails, you’ll realize very quickly these people are anything but entitled,” he says. “They’re living in substandard rental accommodation just for the privilege of being in Vancouver, and contributing to the economy here—and they won’t do that forever. They’re going to vote with their feet.”

Last November, the 38-year-old lawyer and former head of the B.C. Civil Liberties Association helped Andy Yan, acting director of SFU’s City Program, with his headline-grabbing study on home buying in Eby’s West Side riding. In addition to the incendiary data involving Chinese names, the study revealed that 36 per cent of owners on homes worth an average of $3.05 million listed their occupations as housewives or students with little or no income. Fully 18 per cent of the 172 homes purchased were not mortgaged by banks. That means on Vancouver’s West Side alone over a six-month period last year, roughly $100 million in cash came pouring into Canada, almost all of it from China. Yet the homeowners would in all likelihood pay little or no income tax. The total value of all homes sold in the study period topped a half-billion dollars.

Predictably, when Yan’s study was published, a chorus of voices, including former developer Bob Ransford, jumped to criticize Yan: “The danger is intolerance, racism, singling out certain groups of people saying they’re to blame for this,” said Ransford. But such labels have failed to muffle the debate, particularly as more and more Chinese-Canadian voices have begun calling out white developers and academics for making the claim. Fung, the software engineer, says he’s among those “deeply pissed off” by what he considers a slur: “The only people claiming racism are white Anglo-Saxon males—that’s it. These are the same guys trying to label Andy Yan—whose grandparents paid the head tax—a racist? It’s absurd.”

Related: In B.C, a real-estate rage gets real

That sentiment is shared by Ian Young, the South China Morning Post’s Vancouver correspondent and author of the popular Hongcouver blog. Young, who is ethnically Chinese and was raised in Australia and Hong Kong, says the issue is one of money, not of race. “What defines those people in terms of their behaviour here in Vancouver, and in terms of their impact on affordability, is not their ‘Chineseness,’ it’s their ‘millionaireness,’ ” he says. “The idea that there is commonality to be found in the Chineseness—I find that kind of insulting. Why would you think that someone was better defined by the colour of their skin than the colour of their money?”

This is why Fung believes it is so vitally important for Chinese-Canadian voices to encourage a debate over the impact of foreign investment on the local market. “Chinese people have a tendency to be a little quiet, we tend to want to not create ripples—culturally it’s something we’re not comfortable with.”

1550 W 29 Street, Vancouver home with signs of exterior problems. It was on sale for 7.4 million. (Photo by Jimmy Jeong)

1550 W 29 Street, Vancouver home with signs of exterior problems. It was on sale for 7.4 million. (Photo by Jimmy Jeong)

One oft-cited culprit for the barrage of offshore money are government programs aimed at bringing wealthy foreigners to this country—namely Canada’s now-infamous Immigrant Investor Program. Created in 1986 by the Mulroney government, it granted permanent residency to any foreign citizen willing to fork over $800,000, repayable without interest after five years. In effect, Canada had a nearly two-decade run of selling passports—on the cheap. (The U.S. demanded its investor-class immigrants create at least 10 jobs each, and Australia charged twice what Canada did.)

In recent years, it became increasingly common for investor-class immigrants to set their children up in Canada to study, while the family’s main breadwinner continued to work and pay income taxes elsewhere. One federal study unearthed by Young showed that even after five years in Canada more than 60 per cent of investor-class immigrants reported no annual income earnings at all. And those who did reported earnings of just $21,000—less than that of refugees.

Related: An extended Q&A with Ian Young

When the program was finally suspended in 2012, and subsequently cancelled altogether two years later, there was a backlog of some 65,000 applicants. Quebec, meanwhile, is still running its own, identical version. But very few of its investor-class immigrants actually remain in the province. Data collected by Vancouver lawyer Richard Kurland shows that 94 per cent of those who arrived in Quebec in 2008 left shortly thereafter—most bound for metro Vancouver.

David Duff, a professor at the University of British Columbia’s Peter A. Allard School of Law, calls such schemes “bizarre” since they do nothing to prevent wealthy newcomers from dodging Canadian income taxes, providing they spend less than 183 days per year in the country and maintain a residence and business overseas. “Others wonder why these folks get to be treated that way while the rest of us get taxed on our worldwide income,” says Duff, “And the consequence, as we’ve all seen, is the bidding up of house prices in Vancouver.” He’s seen it first-hand: Duff recently sold his own tony West Side home to an offshore buyer.

The old roof of the 4453 W 14 Street home in Vancouver, BC. This home sold for 2.4 million. (Photo by Jimmy Jeong)

The old roof of the 4453 W 14 Street home in Vancouver, BC. This home sold for 2.4 million. (Photo by Jimmy Jeong)

There’s another side to the story, however. Yuen Pau Woo, the former president of the Asia-Pacific Foundation of Canada, doesn’t dispute the impact of so-called “millionaire migrants” on Vancouver’s affordability crisis. But he takes issue with the notion Canada isn’t receiving anything in return. Eventually, Woo says, many wealthy Chinese who used the program to gain access to Canada seek to “align” their personal lives in Canada with their business interests overseas—if for no other reason than to minimize the stress of living apart from their families for six months of the year. As evidence, he points to the half-dozen Chinese firms, including Poly Culture Group, a division of a massive Chinese conglomerate, that he’s helped convince to set up shop in the Lower Mainland through a venture called HQ Vancouver. “Every single one has a Vancouver connection,” he says—usually a CEO or chairman who already owns a house in the city or sends his children to school there. “How many more of these kinds of opportunities are out there waiting for us to activate them?”

The silent, happy majority in all this, of course, is the thousands of Canadian homeowners who have sold their homes for an enormous profit, and the millions more watching their home values climb into the stratosphere—more than 70 per cent of Canadian households own their own home, and many are watching their property values soar with an eye to their retirement. In Richmond Hill, Ont., a Toronto suburb favoured by many Chinese investors, standard four-bedroom homes are now typically priced around $1.3 million, and routinely sell for $300,000 over asking. For now, this is a distinctly uptown economic problem.

With so much cash sloshing about, people outside Canada’s urban hot zones are understandably keen to join the merriment. Last spring, politicians and economic development officials in Nova Scotia welcomed with fanfare the purchase of a series of properties by DongDu International Group, a Shanghai-based development company touting plans for two full-service vacation resorts catering to wealthy, young Chinese professionals. It was hoped the developments would bring much-needed economic activity to the stagnant region of Guysborough County, northeast of Halifax. An additional pair of properties DongDu bought in the capital were supposed to be the beachhead for a centre of excellence for the film industry.

Draped in a souvenir tartan scarf, and accompanied by local dignitaries, the company’s founder, Li Hailin, traipsed through the grass in Guysborough last May for a groundbreaking. Since then, however, nary a shovel has touched the 1,300 hectares of land on the Eastern Shore, leaving many to wonder whether the development plans are for real. Michael Mosher, warden of the district of St. Mary’s, says his council has not yet seen a formal proposal, or a definite timeline. “Because of the state of the global economy,” he said, “they want to make sure when they launch the project, they’ve got the right timing.” A spokeswoman for the Halifax Partnership says the city’s economic development agency is no longer working directly with DongDu, noting that a memorandum of co-operation it signed with the firm expires next month. A request for an interview left with DongDu’s offices in Halifax went unanswered.

Still, even if Chinese investors are disproportionately focused on Toronto and Vancouver, there can be little doubt they’re playing a role in keeping the country’s decade-long housing boom from collapsing under its own weight. It’s difficult to overstate just how important real estate has been for the Canadian economy in recent years. A report a few years ago by Altus Group, a Toronto-based property consulting firm, estimated that home renovations alone contributed as much as four per cent of Canada’s GDP in 2014, or about $64 billion. Add in new home construction, realtors, lawyers and other associated industries and the residential housing industry is responsible for as much as 20 per cent of Canada’s economy. That’s to say nothing of the cottage industry in reality TV the country has spawned over the past decade—everything from Love It or List It and Property Brothers to the ubiquitous Mike Holmes.

With Canadians already owing $1.65 on average for every dollar of disposable income they earn, there were ready signs that domestic buyers were tapped out. The sudden influx of Chinese money over the past couple of years was akin to throwing gasoline onto a slowly dying fire. Which is why no politician in their right mind is likely to take a hard stance against foreign buyers. Says Duff, the UBC law professor, “Nobody wants to shut it down, because it’s like a drug. We always need another fix.”

The multi-trillion-dollar question for Canada’s vulnerable housing market, and the economy that increasingly depends on it, is whether China’s interest in buying Canada is a simply a passing fancy or a stabilizing long-term play. It’s one of the concerns the CMHC hopes to address by charting the behaviour of foreign buyers over time. “If investors are primarily in the market to make a quick buck—to buy a unit, make a capital gain over six months to a year, flip the unit and get out—that can be problematic behaviour,” says Dugan, the chief economist. “We would want to be able to measure to what extent that’s going on.”

Those who have studied the Chinese appetite for buying foreign properties sketch a less dramatic picture, albeit one that’s still less than reassuring. A survey of 150 agents in China by Investorist, an Australian company that markets international properties online, found the vast majority of would-be Chinese purchasers, nearly 90 per cent, have a budget between $500,000 and $1 million—not unlike many Canadians who are seeking to buy a home in Vancouver or Toronto these days. “The majority of Chinese buyers are families that can afford an investment property and possibly a second one,” says Jon Ellis, the company’s founder. “These are mom-and-pop investors who might own a car dealership or a bakery.” Moreover, the report found that most Chinese seeking to buy overseas “wish to use leverage where possible,” which may also have something to do with the need to circumvent Beijing’s $50,000-per-year limit on foreign transactions.

It all points to a group of foreign buyers that, while large and motivated, remain financially mortal, and can therefore be expected to panic alongside everyone else if Canada’s housing market begins to falter. And, as foreign money continues to flood both Toronto and Vancouver, there’s plenty of evidence of ultra-sketchy, speculative behavior that’s not limited to offshore buyers: bidding wars, properties purchased unseen and without conditions, so-called “shadow flipping” by realtors, the creation of shell corporations allowing buyers to avoid being named in transaction documents, accusations of money laundering, and unfair tax avoidance. The list goes on.

The risks for Canada don’t end there. While the turbulent Chinese economy has so far prompted China’s elite to move their money to locales perceived as safer, a full-blown crisis in the Middle Kingdom could well have the opposite effect. If offshore investors suddenly believe their livelihoods are at risk, they may have no choice but to quickly offload overseas houses and other assets in order to pay back creditors. In other words, instead of simply fretting about overzealous Canadians sparking a major housing crash, now we need to worry about a made-in-China crisis, too.

Can anything be done? In B.C., a group of economists is proposing a two per cent anti-speculation tax, which would penalize buyers who let homes sit empty. The idea is to generate a little revenue ($90 million is anticipated in the first year), but more important, to track activity: How many units are owned by people who don’t pay any tax in British Columbia? How many condo units are owned by people who don’t rent them out, and leave them vacant? How is this money entering Canada? At this point, the government doesn’t have a clue.

“If the flow starts in a clandestine way there is no way to regulate it at the other end,” says David Mulroney, former Canadian ambassador to China, adding that every time he spoke to university students in China he was asked whether it was true Canada is a haven for Chinese fraudsters. “We have no idea where the money is coming from, how it was sourced—all of it contributes to an alarming lack of awareness in the local real estate markets,” says Mulroney, current president of St. Michael’s College at the University of Toronto.

Others point to countries like Australia, which requires foreign purchases to be vetted by its foreign investment review board and approved only if they contribute to the creation of new housing stock. A similar approach has been proposed for the U.K. Ellis, however, says the policy hasn’t done much to rein in house prices Down Under, since there are many ways for determined offshore investors to circumvent the rules.

In any case, it’s not exactly Canada as the country imagines itself—cowering from foreigners willing to pay for a taste of our order and civility; wondering if the next big purchase will nudge us into social dislocation, or corruption requiring aggressive government intervention. If for no one else, you’d hope we might get ahead of the problem for the sake of Paul Shen, who’s settling into his new home in Victoria. Should such dark forebodings come to pass, the life he followed his heart to find will look eerily similar to the one he left behind.

—with files from Jessica Meyers in Beijing


 

China is buying Canada: Inside the new real estate frenzy

  1. How you feel about this issue, really depends if you are lucky enough
    or not to have property in Vancouver or Toronto and reaping the windfall
    gains. It’s all about one’s self-interest. Property owners will be the one’s
    complaining when the large city property prices crash and fall 50%, like
    what happened, for example, in the USA (2009) and Japan (1991).
    But, in the meantime, non-property owners and renters are the one’s doing
    the complaining. It’s all about one’s self-interest.

    • My partner and I own a home in Vancouver that has increased a ridiculous amount. However, my self-interest may be tempered by the fact I have 2 non-property owning kids who won’t be able to afford a home in the place they grew up in due to the ludicrous housing situation.

      As far I am concerned, major changes should be brought in to ameliorate the housing crunch, including banning the sale of residential property to non-residents (and *massive* fines for those found breaking that ban). Other cities and countries have policies in place to try to help their residents, and we should as well.

      The provincial and federal governments are totally falling down on this file, and will be vulnerable on it.

      • Will you be pleased if your house price falls 50%, along with your retirement nest egg.
        At least when it comes time to sell, you have the flexibility to help payoff part of your
        childrens’ mortgages and also keep some for your retirement. With interest rates so
        low, I can’t rely on the almost zero interest saving accounts to help fund my retirement,
        therefore will need the equity in my house.

      • DO what they do in Japan.

        it is almost impossible to immigrate to Japan. It is illegal to own property in Japan unless you are Japanese.

        That is why Japan today, looks a lot like Japan of 100 years ago. If you are in Japan, you are there as a guest. They don’t want you to become Japanese.

        • Your claim is simply not correct.
          It is entirely legal to own property in Japan if you are not a Japanese national.
          You can become a Japanese citizen as long as you:
          are over 20 years old
          have lived in Japan for more than 5 years
          speak Japanese
          don’t have a criminal record
          have enough income to support yourself
          are willing to give up your former nationality

    • even if housing fall 50 % it is still over priced .it has gone up 120% in 10 years .please vote liberal out ,
      Canada is for Canadians .our government is selling us out . if they got out of there offices and had a look around at what is happen in our neighborhoods .its not just housing that we are losing its also our community .Maybe its time to hit the street in protest . what else can we do they are not listening .

  2. Said the article:
    “China limits foreign purchases of currency to $50,000 per year, and has been tightening controls to keep money from flowing elsewhere. This has left lingering questions about how so many mainland Chinese have been able to afford expensive houses abroad.”

    At least one Canadian bank, CIBC, is helping mainland Chinese to get around China’s currency controls.

    See:

    h$$p://www.scmp.com/comment/blogs/article/1854618/judges-cibc-bank-supports-clients-who-break-chinas-cash-export-laws

  3. I genuinely believe that any political party who dares to confront the elephant in the room with a sensible solution before the next provincial election will win the lower mainland with a landslide. The amazing part is how many options are available, and how none of them are being followed.

    My two favourite options would be to actively prosecute realtors who don’t report suspicious transactions and/or to massively increase the cost of a demolition permit.

    If a student/housewife buys a multi-million dollar property in cash – that should be flagged. Send a couple realtors to jail and compliance will skyrocket.

    Or, if a demolition permit were to, say, equal the sale price of a house, it would make houses a much less attractive investment option while preserving the heritage of the city.

    • Follow the money, both political parties are run by older individuals who own houses, and both get money from the real estate industry. Particularly the Liberals.

        • The developer/real estate industry gives much money to the Liberals. It’s a well known fact.

          h$$p://www.huffingtonpost.ca/dermodtravis/political-donations-liberals-ndp_b_9654186.html

          h$$p://www.theglobeandmail.com/news/british-columbia/donor-lists-reveal-bc-liberals-greed-for-power/article29535533/

          h$$p://thetyee.ca/News/2016/05/02/Clark-Donors-Tied-Real-Estate/

          • It is not illegal to donate money to political parties

            That doesn’t mean they get special benefits, as lots of people donate, all of this is published

          • Pay no attention to emily, she is just a Liberal shill.

          • @Emilyone

            Industries and corporations (and unions) do not donate to political parties out of the goodness of their hearts. They do so precisely because they expect special consideration of one sort or another.

            That’s why a past federal Liberal government banned corporate and union donations (and why the present Ontario Liberal government is planning to do something similar AFAIU). The BC Liberal government, on the other hand, is perfectly fine with the current state of affairs, much to my chagrin.

            One can only hope the BC NDP take the high road and try to make this an election issue, and thus force the BC Liberals to do something about it. Barring that, we do have citizen initiated referendums here in BC, and I’d hope to see this issue appear as a referendum question should both parties cling to the indefensible status quo.

            And, while on the topic of citizen initiated referendums, if the federal and provincial governments continue to refuse to do anything meaningful about the ludicrous housing situation here in BC, perhaps we’ll see an attempt at getting a referendum question on that issue.

          • Never been a Liberal dude

          • JimR

            You imply that politicians are on the take, that is illegal, and you can’t make such random accusations.

            If people don’t contribute to political parties privately, they’ll have to be supported with tax money. Would you prefer that?

            They can’t operate on air ya know..

          • @Emilyone

            If corporate and union donations are not problematic, then why did Chretien ban them when he was PM, and why is Wynne intending to do the same now?

            As for how political parties would support themselves without corporate and union donations, why the same way the federal parties do now, by donations from individuals.

            And, FWIW, I had no problem with the per-vote subsidy that Harper did away with. Bringing it back would not bother me one bit.

            Finally, I never accused *politicians* of being on the take, I accused corporations and unions that donate to political parties of expecting special consideration in return. And, I do think that it’s just human nature that a political party is not going to get too far offside from the wants of its big donors if it can at all help it.

            Governments exist to serve human being, not corporations, and not unions. Restricting donations to coming from human beings should be a no-brainer.

          • @JimR
            Chretien did that because it was popular and a vote catcher,,,it was also stupid

    • There are many possible solutions – an obvious one would be tax foreign owners at the maximum rate on the profits from any residential property sales.
      But it is obvious that the Clark government does not want to do anything – they have become dependent on the false boom this creates . Everyday we are bombarded with ads telling us BC has the strongest economy – yet the vast majority are worse off every year.

  4. As a young teenager I dreamed of one day owning a
    mansion in the British Properties neighbourhood in West
    Vancouver or in the Shaughnessy area of the Westside, and
    driving around in those luxury automobiles. It was not possible
    unless I became a highly paid professional or a successful
    business owner. These residential areas were just out of my
    reach. I said it must be nice to have been one of the early British
    settlers or the descendants who received these multi-million
    dollar mansions passed thru the generations. No uproar amongst
    the common folk then.

  5. I don’t think Macleans understands the meaning of ‘limited means’. I certainly can’t afford to buy even half a duplex in Victoria, and lost my job to a foreign worker.

    I guess compared to Chinese billionaires, only being in the top 10% is limited means, but it’s certainly not the situation for most Canadians.

    • In Vancouver, I feel that the poverty line should be $100,000 a year income, and $400,000 net worth.

  6. Regardless of if you currently own Vancouver/Toronto property or not, think long term. If we as Canadians (from all walks of life) allow this to continue, will there be any TRULY Canadian part of Canada left in 25 years? Is something right, just because you’ve been thrown a hefty bag of money to look the other way? Fraud is fraud, how else are these wealthy foreigners smuggling millions of $’s out of their own country when they are limited to only $50k a year? And what’s the likelihood that the money being used isnt corrupt to some extent when these foreign buyers wont even bat an eye to throw an extra $300K at a property just to outbid the next foreigner looking for any chance to dump their money into Canada’s super tax-lax property market? Wrong is wrong, and our children deserve a better fight from us than this. If you feel that Canada needs to restrict foreign ownership & speculation of Canadian residential real estate, please sign the online petition at: https://www.change.org/p/justin-trudeau-restrict-foreign-ownership-speculation-in-canada
    Lets ensure what made Canada great in the past will still be there for our children to be proud of into the future.

    • Chinese immigrants made Canada great in the past, so I guess you’ll get your wish.

      • I don’t feel these people have any connection at all to the immigrants of every race who came to Canada and worked hard to build our country.

    • S.H. THANK-YOU THANK- YOU !!!
      I have sign your petition . you are so right we need to fight for our children.
      Canada is for Canadian .

      • Not me honey

        Chinese are just as Canadian as you are

        Where ever did you guys get the idea that Canada was some white Anglo-Saxon country?

        • Emilyone:

          I don’t think you are really reading the comments. No one is saying Canada should be white what is being said is that people who buy here should live here, and not just buy real estate to launder there money. SC hill is correct. If it wasn’t dirty money why would they through an extra $300k at a house without balking. All the immigrants that I know from all nationalities are just plain cheap (sorry) because they have worked hard for their money and want value. These people wouldn’t be inflating real estate in this manner. These are the people that would be getting you to through in everything just so they would buy your house, and guess what, these are the people that I am proud to call neighbor and who contribute to the cultural diversity of our country.

          • don’t think you are really reading the comments. No one is saying Canada should be white. What is being said is that people who buy here should live here, and not just buy real estate to launder their money. SC hill is correct. If it wasn’t dirty money why would they throw an extra $300k at a house without balking. All the immigrants that I know from all nationalities are just plain cheap (sorry) because they have worked hard for their money and want value. These people wouldn’t be inflating real estate in this manner. These are the people that would be getting you to throw in everything just so they would buy your house, and guess what, these are the people that I am proud to call neighbor and who contribute to the cultural diversity of our country

          • yes thank you eileent
            if you are buying a house or business in Canada . you should live here be a canadian .
            and not just for 6 months untill you can launder all your money and sent it back home .

        • I don’t think you are really reading the comments. No one is saying Canada should be white. What is being said is that people who buy here should live here, and not just buy real estate to launder their money. SC hill is correct. If it wasn’t dirty money why would they throw an extra $300k at a house without balking. All the immigrants that I know from all nationalities are just plain cheap (sorry) because they have worked hard for their money and want value. These people wouldn’t be inflating real estate in this manner. These are the people that would be getting you to throw in everything just so they would buy your house, and guess what, these are the people that I am proud to call neighbor and who contribute to the cultural diversity of our country

    • Great comment and thanks for the link. I am going to sign it now

  7. In the election companion and debates, JT talked a lot about housing affordability issues and how his government (if elected) was going to improve it particularly for middle-class people. Since this government came in October we saw housing affordability issues have become much worse particularly in the biggest and main two areas in Canada (Metro Vancouver and Greater Toronto areas). 30 % to 40 % increase of home prices in a matter of weeks with huge shortage of homes and rentals…this is really a big joke..!!!!11

    In the last few months, dirty practices like shadow flipping by realtors, money laundry use of buying great number of properties, and thousands of empty homes owned by foreign investors have contributed hugely to skyrocketing prices and huge shortage of homes in Lower Mainland, Metro Vancouver and even in the Island in BC. The bad thing is that the BC and Federal governments are very well aware of that.

    Water , food, and housing are most important necessities in life . If the BC and Federal governments keep ignoring the housing crisis, it will have much more tragic impacts on the BC society in the future.

    http://thetyee.ca/News/2016/05/02/Clark-Donors-Tied-Real-Estate/

    http://bc.ctvnews.ca/real-estate-loophole-lets-wealthy-buyers-save-millions-in-taxes-1.2874603

    http://vancouversun.com/opinion/an-affordable-housing-manifesto

    http://www.torontosun.com/2016/04/20/canadas-subsidizing-foreign-millionaires

    http://www.torontosun.com/2016/04/29/foreign-buyers-create-real-estate-bubble-risk

    http://www.moneysense.ca/spend/real-estate/8-factors-that-really-mess-up-vancouvers-real-estate-prices/

  8. The housing crisis in areas like Lower Mainland & Metro Vancouver areas as well as Greater Toronto area is a disaster affecting the quality of people lives, health, performance at work and career , their families and the way the kids are raised. It is sucking people salaries and their whole lives. Housing is a very basic need in life and when people are suffering from this issue, their lives will turn into hell. Clearly, in the last few months, dirty practices like money laundry use of buying thousands of properties by foreign investors most of which are empty have contributed hugely to the crisis in Lower Mainland and Metro Vancouver areas in BC. This has caused skyrocketing home prices and rentals as well as huge shortage of homes. The bad thing is that the BC and Federal governments are very well aware of these dirty practices but don’t seem to care despite all the pressure from national and international media, social media, university and expert economists’ studies and reports addressing the housing crisis. This is very bad, irresponsible, dirty, and disgusting.

    http://www.calgaryherald.com/business/foreign+buyers+crushing+home+dreams+vancouver+canada+study/11905004/story.html

    http://thetyee.ca/News/2016/05/02/Clark-Donors-Tied-Real-Estate/

    http://bc.ctvnews.ca/real-estate-loophole-lets-wealthy-buyers-save-millions-in-taxes-1.2874603

    http://vancouversun.com/opinion/an-affordable-housing-manifesto

    http://www.torontosun.com/2016/04/20/canadas-subsidizing-foreign-millionaires

    http://www.torontosun.com/2016/04/29/foreign-buyers-create-real-estate-bubble-risk

    http://www.moneysense.ca/spend/real-estate/8-factors-that-really-mess-up-vancouvers-real-estate-prices/
    http://www.macleans.ca/economy/economicanalysis/chinese-real-estate-investors-are-reshaping-the-market/

  9. The Chinese folks buying up most of Vancouver aren’t necessarily in love with the city.

    I suspect many of them are just using real estate as an investment scheme to use up the money that they have skimmed from the Chinese people. It is also good to have a place to go when things get hairy…..they can “get outta dodge” with their ill gotten gains.

    • How does that make them different than any other immigrant?

      That’s what people come here for,,,a new life.

      • The problem is non residents are buying property, reportedly often to launder ill gotten gains, not living in the house, not maintaining the property, not contributing to the economy other then driving up the prices of home. If they are coming here for a new life, they should come. If they can’t come then they shouldn’t be allowed to buy real estate. I have been told by Chinese friends that Canadian Caucasians are stupid and that they don’t know their own system and all the loopholes where as in other countries these loopholes are well known. Canada should not be allowing people to stash their ill gotten gains here by buying real estate and driving up the price, Remember when someone wins there is at leas one other person that loses.

    • Said the Brit whose ancestors colonized mainly poor countries as part of the British Empire.
      I wonder what the First Nations of Canada thought back in the day.

  10. Wow, another great article. I made the same comment on a related article this author wrote, but I will copy most of what I said as it is applicable here as well.
    I lived in BC for 18 years and saw the changes that happened over that time. I am sick with what is going on now and after reading this, I don’t see how there can possibly be any change in the housing market without serious economic ramifications. I have lived in Ontario for 10 years now (transferred out) and have never regretted moving here, especially for the opportunities afforded for my children. After reading this and other related articles, it only gives me greater comfort that we made the right decision in moving here.
    When I bought a home in 1999 in BC, real estate was high even then, in comparison to the salaries you could earn in Vancouver. I remember saying to friends at the time who were finding it challenging to buy a home, to “just wait; housing prices are bound to come down”. Was I so very wrong! My friends in Toronto earned more, paid substantially less for their homes, one of them got to stay home home with the kids, and even then, had a much better lifestyle than we could afford. In BC we struggled with two salaries and had to have a tenant to give us some financial breathing space. As well, the cost of living was much less in Ontario at the time than in Vancouver. This is still the case to the best of my knowledge. So not only are salaries less in Vancouver, but your buying power is far less. Food, insurance, entertainment and even used cars are cheaper in Ontario. Admittedly ,Toronto housing is more expensive now as well, but outside the GTA, you can still purchase a nice home in a town such as St Catharines that is in a good area with great schools for an average of$300K and there are homes for far less than that. The commute from this community to larger cities such as Toronto is just over an hour.
    I think a very precarious and unwieldy economic situation has been created which will have to collapse first, in order to be rebuilt properly, from the ground up. If I lived there now and owned a home, I don’t think I would hesitate to cash out and sell, move somewhere with cheaper real estate and jobs and bank my gain. I would find greater comfort in knowing that I had my retirement money and that my kids would also be able to buy a home in the community they grew up in, than looking at the mountains for the five days a year they are visible.

    Personally after reading this it would serve the BC government right if most of the younger professionals sold their homes, cashed out and just left the province. Businesses would follow as they wouldn’t be able to attract any talent that could afford the lower wages they paid them and buy a home or pay high rent and then the province would be home to a lot of empty expensive homes. Of course this wouldn’t happen, but what would the province do if it could?? Maybe they should think of that and start doing long range planning instead of just until the end of their term.

  11. China may be buying Canada – but more to the point, we are selling Canada to China. We could stop if we chose, but greed on the part of governments and citizens is dictating the kind of community we will be living in.

    • Said the Brit whose ancestors colonized mainly poor countries as part of the British Empire.
      I wonder what the First Nations of Canada thought back in the day.

  12. Good to see the media devoting more time to this – need the pressure on both federal and provincial politicians who refuse to deal with it. Argument that this is somehow good for economy is bogus – few can really “cash in” because they or their families will spend the money buying their next homes – meanwhile, a whole generation and likely future generations are losing badly. There is ample evidence that foreign buyers pay little taxes or invest in anything accept housing, while using many of our services. And it seems obvious that it is hard to have a real economy in a city where no one who wants to work there can afford to live. Those politicians who allow this to happen will be cursed by future generations.

  13. Chinese immigrants have always been hard working decent people who are law abiding.

    It is said there is one dead Chinese for every mile of the national railway, but some Canadian can’t afford a house, and suddenly a nation of 1.2 billion is to blame for this? LOL

    • The many comments you have written on this article make me wonder if you actually even read it. The article gives ample evidence of the effect of Chinese money and makes it clear that this has nothing whatsoever to do with Chinese who died building the CPR or any other legitimate immigrants to Canada.
      I have to believe you are either a} trying to defend a vested interest here – like the Liberal government perhaps, or b] you just are trying to turn the crank of others who post, by deliberating making provocative statements . In any case I hope you have had your fun for the evening.

      • I agree with you Ole Grouch or perhaps the poster is a real estate agent.. The article is not talking about the Chinese who have lived here, and who want live here because they genuinely want to be a part of this country. It speaks to people from other countries that are starting to treat Canadian Real Estate like a stock market and are driving up prices by spending their ill gotten gains (for the most part). One wonders what will happen when they go to cash out, The Canadian government set up rules to prevent this, but in BC, money has made the system turn their backs. Sure it is great to make money, but at the expense of the law, morals and the future of our children? I don’t think this. This is the same as corporate greed and unfortunately another example of the liberal legacy of the Campbell government. Everyone has to make money now and no one seems to think or worry about the future or the ramifications of what they are doing. A good comparator is a North American company who wants to increase their stock price. They move their manufacturing to a third world company where there are no rules surrounding health and safety or pollution controls…soon jobs are lost and eventually no one in North America can buy their product except for the very rich. Now the very rich from those international countries are driving up the price of housing up and soon the people who now have had their wages pushed down to increase company profit and stock prices will no longer be able to live in their city. We are setting our children up to become the future street people and perhaps much of Canada to become a future third world. Perhaps an extreme example but it is happening people. I think everyone should read the “Story of Stuff” by Annie Leonard to really understand some of the things going on today. As I said in previous posts I really don’t think this can be fixe without serious economic ramifications and people that want a home need to seriously consider cutting the cord and moving to another province.

  14. At least with the Chinese immigrants and their subsequent generations
    there will be fewer drug addicts, random crime and sexual assaults,
    panhandlers, vandalism, road ragers, petty thieves, theft of donation
    boxes, bike thefts….and in general, a society less fear of physical violence
    and verbal assaults.

    • China has its own problems, and if you believe that the type of crimes committed depend on race, then by your own reasoning those problems will be brought here.

  15. It’s up to you to afford the house you want. It’s not up to the govt to provide one for you

  16. Elect a new leader who says they will ban foreign ownership, and put in rental controls. They will win an election in a landslide

    • Well, there goes democracy, capitalism and the free market…not to mention the economy.

  17. Don’t worry everyone, the real estate prices in Vancouver and Toronto
    will crash one of these days. Exactly when, who knows? Keep some
    cash aside to purchase properties at much lower prices for the next
    uptrend. Parabolic rises in prices, whether the stock market or real
    estate, always have dramatic declines. Who will be the greatest fool
    out of the fools that are buying into this property bubble?

  18. The only difference between the N. Korean regime and the brutal Chinese Communist Party is that Western corporations are making fortunes with their business dealings in Mainland China and are therefore keeping the truth from people living in the West because these insatibly greedy corporations either own Western media or control it.
    Since 1999, the blood-thirsty Chinese Communist Party has been systematically eliminating the tens of millions of gentle Falun Gong practitioners who live in China by the use of torture, slavery, organ harvesting and murder. This genocide is being completely ignored by the media and the United Nations because of one thing, corporate greed. Shameful!

    • That is horrible. So the odds are pretty good, that some Vancouver homes are being bought with the confiscated property of these 10’s of million Falun Gong practitioners and probably that of the other 10’s of million that communist China put to death since the late 50’s. Can you imagine if you ended up living beside people that were involved in that? Would you want them for your neighbors? How horrible.

      I have posted numerous times in this thread and with all these comments and what is going on in the province, I really don’t know why people stay. I moved and have never looked back .I think my final straw was when I found out that even thought I lived in a good neighborhood, a friend’s son in high school found out his friend lived by himself in a 1 million dollar home (in 2006) and was the son of a Taiwanese drug lord. Not the kids fault, but not the kind of neighbors you want. I am sorry I would rather live beside honest hard working blue collar people in nice neighborhood than wealthy criminals any day,

      I now live in the Niagara region in a neighborhood where people talk, socialize and help you. The weather here is amazing, we are an hour from Toronto and 10 minutes from the border, houses are really inexpensive overall and the gardening zone is the same as Vancouver…season is shorter of course. For some reason this area seems to have been overlooked so it has maintained it’s character, sense of values and uniqueness. Despite still having a lot of family and friends in BC, even if I had the money to buy back into Vancouver, I would never go back. I can’t say enough good things about the Niagara Region and I lived in BC for over 18 years the last time and 7 years when I was a kid, so 25 years in total.

      For all of you still in Vancouver living in this horrible situation I hope it changes or that you take charge of your lives and make the changes necessary to get what you want for yourselves and your family despite what the government wants to let you have.

  19. Didn’t the British do this back in the day, when the many British built
    mansions in many very poor countries around the world, and some even
    became part of the British Empire. They were happily flaunting their
    wealth. I am sure the locals were despising these Brits. We can’t
    continue to suppress the non-whites, they are catching up economically
    and are also flaunting their wealth.

  20. The rich immigrants & foreign buyers of the past used to be the British,
    who bought properties in West Vancouver and the Westside. We didn’t
    complain then. We just couldn’t afford to buy there. Now with a much
    greater population, it is not surprising that land prices even in East Vancouver
    would be rising. The only difference is that the rich buyers are now mainly
    from China. Why are we complaining now, because the whities are racists.
    Remember whities used to burn down Asian owned stores and protest on the
    streets that Asians were taking their jobs. And banned Asians from purchasing
    houses in the British Properties in W. Vanc. If the current foreign investors
    were again from Britain or other Western countries, the whities would not be
    in such an uproar about Vancouver real estate prices.

    • It really only seems to be the whites who are leaving the city as well and writing blog articles about how “Vancouver doesn’t love them” etc.

  21. We banned Asians from buying homes in the British Properties of West Vancouver.
    These restrictive covenants still appear in the land title documents, but are not enforced.
    Should we go back and allow only the British to purchase the high-end luxury homes in Canada?

  22. The second largest country in the world has a housing crisis, unbelieveable.
    We can use our land much more efficiently. In comparison, seven Englands
    could fit into the land mass of BC, and England has a population of 50 million.
    Canada’s population needs to spread out. Maybe with global warming, more
    people will move away from along the US border and from the West coast.

    • it’s due to the limited nature of buildable land in the city of Vancouver because of ocean/mountains/USA border/Agricultural Land Reserve. People want to live in the city. And everyone in the city is fanning the flames by constantly sharing “Most Livable City” media articles.

  23. This is sensationalist dramatic drivel. Hey Ian Young, what’s wrong with the “Best and the Brightest” working hard to design, build and then yes, even sometimes sell, housing? Along with clothing and food, housing is one of our only human needs. And people live in better dwellings than they ever have – thanks to the dedication of folks who actually build residential housing in this city. And we have LOTS of work to do here. If we expect to accommodate (literally) the expected 1 Million new residents to the Lower Mainland in the next 25 years we must build creative new housing solutions, because you may not believe this, but we’re out of greenfield building sites. There is no more virgin land to absorb our housing needs. So we’re going to build up, or infill. And damn straight that single family zoned lot in Dunbar is worth 3 Million bucks. One of the most desirable, safe, and close-to-UBC-students-who-pay-high-room-rental-rates in the whole region – and it’s stuck with stupid restrictive RS zoning which limits the built amount of housing to 0.64 FSR of a standard 4000 sq/ft lot. That means as the city grows and demand increases the square footage of housing does not increase, thus prices go up. All things considered the land is going to go up in value whether we like it or not, due to increasing demand and capped supply, so we need to start making changes that will actually result in more-affordable housing being built for those who want to live here. There are thousands of things we can do without resorting to sky-high condo towers. Remove setbacks. Allow party walls and fee-simple ownership. Remove minimum parking requirements Allow laneway houses to become 2.5 or even 3 storey homes. Let people subdivide the lots up to 3 times each. (If a standard lot is 33’x122′ that makes three 33’x 40′ lots – HUGE in the world city scheme of things.) Also let people subdivide the property via strata rules. Encourage lane use by pedestrians and put street names on the lanes. Let’s throw out all RS zoning in the city and replace it with a new hybrid development category that allows for infill like this up to an FSR of 2.0 or even 3.0 we’ll be well on our way to creating affordable housing young families will buy. 75% percent of the land in the city of Vancouver is the exact RS zoning you framed this video with – and its restrictive nature is a MASSIVE contributor to unnaffordability. Ian, you and the media at large seem hellbent on focusing merely on Chinese money, but I have news for you, even if Chinese money were to dry up tomorrow prices in the city will continue to increase. Because more people want to live here. And there is no more land to build on.

    • I do not agree that this is sensationalist drama. I have seen it happen. I lived in Vancouver for 18 years until 10 years ago and keep in touch with what is happening as I have family and friends there. You sound like a young well educated recently graduated Vancouver city Planner Kylemacmac who either hasn’t lived in BC all this time, or is not aware of the evolution of the issue at hand. However some of the things you are proposing would mean whole neighborhoods would have to be demolished and rebuilt to accomplish this. I guess all those houses that have been bought by international buyers who are not living in them would be very good candidates for something like this Actually that would be very smart. Buy real estate, drive up the prices so no one can live there, so the city will have to think about rezoning and redesigning neighborhoods to increase density. Just think about the potential profit. Just brilliant. Then you can pack more people into an area, they will get used to living in smaller homes as that will become the norm else.

      As for people wanting to live there.., a lot of people seem to want to buy houses, but not live in Vancouver as I mention above. That in itself is another huge issue, and is not sensationalistic but the truth. The people that would actually buy and reside in the community can’t afford to buy on the salaries they are able to earn in Vancouver. When I lived there I made okay money, not great, but when I moved to the GTA my salary went up 40% for the same job and the house we bought was 20% cheaper 10 years ago. There are some huge economic issues in BC. Perhaps some of it is driven by the fact that Ontario experiences greater economies of scale. There are more people in the GTA I believe than the entire province of BC. So do some comparisons on the neighborhood compositions and density and tell us how the GTA can fit that many people into that area yet you say that Vancouver and the surrounding area does not have enough room to grow.

      There is land but it is in Burnaby, Coquitlam, surrey Delta etc etc. The problem is people are concentrating on Vancouver because they think that is the place to be When I lived there the price difference between living on the endowment lands and east of oak street…then the prices just plummeted.. Things change and perspectives change. There is tons of urban reserve land that is currently agriculture…people are holding it banking on cashing out eventually.

  24. Nothing new here. In fact this has been happening since the late 80’s and the excessively rich Hong Kong Chinese decided to turn Vancouver into Hongcouver as the place to escape to when Hong Kong returned to communist rule as planned in the mid 90’s.

    They showed Vancouverites willingness to sell their city if offered enough money to do so. And offer they did and now most of Hongcouver belongs to them!

    And now we’re complaining? Wow! Talk about closing the barn door after the animals escape!

  25. David Eby is going to be priced out of the market because he mistakenly sold his condo instead of becoming a landlord and renting to someone else until capital appreciation might allow him to buy a larger property or a second rental.

  26. But you don’t talk about the difference is a single mother with 3 children roughly 56 dollars a day.
    but a single Syrian gets 71 dollars for food a day.
    The person who lived here there whole life paying taxes receives less from government then a immigrant does so how is that fair?
    The lower class and middle class suffer from immigrants it makes it harder for them such as cost of food,rent,utility’s and jobs will pay less and minimum wage will take longer to go up based on supply and demand.
    But government and upper class benefit from immigrants because they pay more taxes on food,rent,utility’s. {PERFECT EXAMPLE VANCOUVER}

    There also is numerous negative side effects such as abuse of the services of Canada,illegal immigration,trafficking drugs,identity and financial fraud,corruption of the government.

    Especially the Asians they should be any true Canadians enemy.They are coming to Vancouver with fraudulent money,bringing heroin,take student loans get degree and just leave and never pay them back,have illegal immigrants brought over,financial bearings,extreme corruption in(VPD,government,and social services),slumlords, and they gangbang 17 year old girls(seen with my own eyes)and with all of these facts why the fuck do they have there own month in Vancouver……where is aboriginal,English,french,Italian ,Ukraine,Indian,black month WTF is this favoritism……….welcome to japanada……i been told numerous times Canada doesn’t believe in there own people but i think its the people who don’t believe a future treachery country.

    WHEN SOMEONE TAKES FOOD OUT OF MY CHILDREN’S MOUTH I M SUPPOSE TO BE HAPPY!!!!!
    ACTION HAVE REACTION PEOPLE HAVE GOOD REASONS TO DISLIKE MIGRANTS TO CANADA.

    THE DIFFERENCE IS PRINCIPLES I GIVE EVERYDAY TO CANADA THROUGH WAR OR POVERTY I WOULD STAY EVEN TO DIE OR STARVE.

    THEY TRAVEL HALFWAY AROUND THE WORLD TO CHASING GREED OR THERE COWARDS AND THEN WHEN THERE AIN’T SHIT THERE GONE…….THANKYOU COME AGAIN…..

  27. Even if prices don’t decline soon (or ever), rising house costs create long term economic pain that will be felt by everyone, including homeowners who seem to benefit from the rising prices on paper.

    If they sell a house, they may not be able to afford a new one. And people need to live somewhere for the rest of their lives, right?

    So at the end of the day it will be the Chinese investors who will benefit and the children of Canadians who die and leave properties for them.

    Canada’s politicians don’t have the teeth or the balls to deal with the problem, but if they don’t, our children will pay for it dearly.

    Here’s the solution: restrict purchases of land to Canadian citizens, as many other countries do, for example, Thailand. Eliminate greenbelts as does Germany that never had severe real estate bubbles. This will ensure Canadians and not anyone else have access to buying Canada. A refreshing idea, isn’t it?

  28. DO YOU GUYS AGREE ? Canada soon will be change under new name called CHINADA .
    its no longer Vancouver , THEY TOOK OVER THE PLANET . HONGKOUVER , CHINESE INVASION all white people slowly deminished . Poor getting Poorer and Rich getting richer .

  29. Foreign investment in Vancouver is having an effect on increasing prices and the governments intervention on foreign buyers did have a chilling effect on sales in the months that followed. Unfortunately prices are still way too high and nearby areas such as Port Moody are being driven sky high as well. Talking to a realtor on the island http://www.brettcairns.com and it is apparent that a small market like the Comox Valley is seeing prices go up as well this year. They are still remarkably affordable when compared to the mainland but nevertheless the trend is upward largely driven by reduced supply and increased demand.

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